Medical debts present an insurmountable challenge for many adults

Medical debts present an insurmountable challenge for many adults

On Behalf of | Jan 7, 2022 | bankruptcy |

Modern health care can do incredible things. People can survive severe brain injuries and aggressive cancer. Often, intensive and cutting-edge treatments come with premium price tags. Even those with health insurance coverage often have responsibilities for the care that they receive.

Many insurance plans have deductibles that are many several thousand dollars. Even after you meet that deductible, you may have coinsurance or co-pays for all the care that you receive. It is little surprise then, that so many Americans struggle with medical debt.

Medical debt affects many American households

Medical debt is a major concern in the United States. Half of all Americans carry medical debt. Of those people, 57% owe more than $1,000. Debt collectors in the country own and will make collection attempts on millions of dollars of medical debts.

Other times, the hospitals themselves take collection action. They might pursue a lien on someone’s property over unpaid medical debts. If you have medical debt you can’t repay, bankruptcy may be the only solution to avoid adverse consequences.

Bankruptcy stops collection activity and ends repayment obligations

Once the hospital garnishes your wages or puts a lien against your personal property, you are in a vulnerable legal position. However, when they first serve you with a collection lawsuit, you have an opportunity.

Filing bankruptcy before you go to court for debt-related hearings can lead to the dismissal of the pending hearing. It will also prevent your creditors from calling you or filing another lawsuit to collect on the debt until the courts resolve your bankruptcy.  Even if a judgment has already been entered and a garnishment has started, you can stop it by filing bankruptcy.  Even if a judgment has already been entered and a garnishment has started, you can stop it by filing bankruptcy.

If you successfully complete bankruptcy and receive a discharge of your debts, you will not have to repay your unsecured medical debts anymore.

Bankruptcy provides you with a financial clean slate

The more you owe in medical debt, the more you will have to spend from your monthly budget making payments on those debts. There is frequently a ripple effect for large debts on the rest of your financial situation.

You may have to put off other payments or accrue credit card debt trying to make ends meet while paying on that medical debt. After discharging your debts, you can rework your budget and regain control of your finances.

Filing for personal bankruptcy allows you to take control over your situation and finally move on with your life after your discharge.